EVFTA- Promising agreement at highest level commitment that Vietnam has ever had
What is EVFTA?
- EVFTA is a free trade agreement between The European Union and the Socialist Republic of Vietnam.
- Time of validation: from the date of entry into force of this Agreement. Starting date is Arrival date of the goods in EU.
EVFTA’s promising benefits
- Eliminate or deduct import custom tariffs: import tariff of 99% of export products to Europe will be eliminated or deducted to 0%, maximum within period 8 years on originating goods provided for items in staging category A, B3, B5, B7 when buying Apparel and Clothing products which satisfy 2 conditions: products need to be produced in Vietnam and fabric origin from Vietnam and/or Korea and/or the EU.
- Custom Duty will be determined by the HS Code of the product. Each HS Code has been classified in the 4 following categories:
A= Immediately Free / 0%
B3 = shall be removed in 4 equal annual stages / 3% reduction p.a.
B5 = shall be removed in 6 equal annual stages / 2% reduction p.a.
B7 = shall be removed in 8 equal annual stages / 1.5% reduction p.a.
Note: Vietnam exporter can choose the most favorable treatment with lowest custom tariff between different trade agreements such as EVFTA, GSP form A (Generalized System of Preferences),… For example, current import tariff 9.6% for goods has GSP form A (Vietnamese material) will be continued to apply as long as it is lower than the tariff under the EVFTA.
- Certification and self-certification: Vietnamese exporters will need government certificates (Certificates of Origin-C/O) or self-certification or EUR.1 certificate for export goods. EU approved Vietnamese exporters can make use of self-certification in case of consignments not exceeding the value of €6000. In the future the EU may move to a system of registered exporters (REX).
EUR.1 is a form used in international commodity traffic. The EUR.1 is most importantly recognized as a certificate of origin in the external trade in legal sense, especially within the framework of several bi – and multilateral agreements of the Pan-European preference system (the European Union Association Agreement).
- October 2010: Vietnam’s PM and EU’s President agreed to start EVFTA negotiations;
- 2018: after rounds of negotiation, the European Union (EU) and Vietnam decided to split single text from beginning into 2 texts: EVFTA and IPA (Investment Protection Agreement);
- 25 June 2019: the European Council approved the content of EVFTA and IPA;
- 30 June 2019: two texts EVFTA and IPA were signed by EU and Vietnam in Ha Noi, Vietnam;
- 29-31 October : A delegation from the Parliament’s International Trade (INTA) Committee came to Hanoi, to discuss the FTA/IPA with Vietnamese parliamentarians and government officials;
- 6-7 November: INTA Committee debate on draft recommendations for consent;
- 2-3 December: INTA Committee debate on proposed amendments to the recommendations;
- 20-21 January 2020: INTA Committee vote on the recommendations;
- 12th-Feb-2020: European Parliament voted on the trade deal and the investment protection agreement in Strasbourg
- 30th-Mar-2020: EU Council approved EVFTA
- 8th-June-2020: Vietnam National Assembly deputies officially ratified the Europe-Vietnam Free Trade Agreement (EVFTA) and the Europe-Vietnam Investment Protection Agreement (EVIPA)EVFTA is set to be effective one month after Vietnam and EU have notified each other that legal procedures have been completed.